In an action against the endorser of a promissory note Made
"negotiable in the Bank of the Metropolis," the declaration averred
a demand of the same at that bank. No other notice of the
nonpayment of the note was sent to the endorser but that left for
him at the Bank of the Metropolis, and it was proved that there was
an agreement by parol with the endorser as to other notes
discounted previously by the bank for his accommodation, that
payment and demand of payment should be made at the bank, the
endorser residing a considerable distance from the bank.
The court held that parol evidence was admissible to show the
agreement relative to the place where payment of the note was to be
demanded, although the agreement did not appear on the face of the
note. Such an agreement is a circumstance extrinsic to the contract
made by the note, and its proof by parol is regular.
The endorser of such a note is himself bound by the contract
made by the drawer and by the established and known usage of the
bank.
Where it was omitted to allege in the declaration on the note a
demand of payment on the person of the maker, but it averred a
demand at the bank "where the note was negotiable," such averment
in the declaration could not be true unless there was an agreement
between the parties that the demand should be made there, and the
averment must have been proved at the trial or the plaintiff could
not have obtained a verdict and judgment, and after a verdict the
judgment will be sustained.
This action was instituted in the Circuit Court for the County
of Washington by the Bank of the Metropolis on a promissory note
dated May 26, 1819, drawn by George A. Carroll and endorsed by W.
Carroll and Robert Brent, for $1,100, payable at sixty days and
negotiable at the Bank of the Metropolis. The declaration set out
the note and averred a demand of payment at the Bank of the
Metropolis. In support of the issue on the part of the plaintiffs
in error evidence was offered that the accommodation given by the
said bank to George A. Carroll on a note similarly drawn and
endorsed with the present was given by the bank about three years
before the date of the note, on which the suit was brought and was
given with the knowledge of the endorsers thereon and in
consequence of their solicitation, and for the purpose of proving
that it was the agreement and understanding of the bank and W.
Carroll at the time of agreeing to give him this accommodation that
the note to be discounted should be payable at the Bank of the
Metropolis, and the notes severally taken for the renewal of such
notes and for the continuance of the said accommodation should be
in like manner
Page 26 U. S. 90
payable and demanded at the bank; they offered to prove by parol
evidence that the said Carroll did not reside in the District after
the winter in which W. Carroll lived in the City of Washington, and
that that winter was the winter of 1817, and that after such time,
said George A. Carroll occasionally visited the city and resided at
Washington, in Maryland, about twenty miles from the city, and at
Port Tobacco, and that many of the notes taken for the continuance
of the said accommodation were expressed to be payable at the bank,
and that all notes previous to the one now sued on were there
demanded and such demand acquiesced in as sufficient, and
subsequent notes given in renewal of the notes so demanded; that it
was the custom of the said bank to require in all cases where the
drawer was a nonresident that there should be such an agreement to
pay such notes at the bank; that the bank never would have agreed
to discount the notes except upon such a condition, and this was
the understanding of the bank, and necessarily presumed to be known
to W. Carroll and the endorsers at the time of making such
accommodation or at the time of his removal from the City of
Washington.
The counsel for the defendants objected to the evidence, but the
court overruled the objection and admitted the evidence to be
given. And the counsel for the defendants prayed the court to
instruct the jury that to enable the plaintiffs to sustain their
action aforesaid against the defendants, it was necessary that a
personal demand should have been made upon the maker of the note
for the money in the said note mentioned, but the court refused to
give the instruction, but instructed the jury that if from the
evidence given as aforesaid the jury should be satisfied that it
was agreed by all parties whose names appear on the notes and the
plaintiffs that the payment should be demanded at the Bank of the
Metropolis and that it was so demanded at the bank, then a personal
demand of the maker was not necessary. To which several refusals
and opinions of the court the defendants by their counsel excepted
and sued out this writ of error.
Page 26 U. S. 91
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court:
This was a suit brought in the Circuit Court of the United
States, for the District of Columbia on a note made by G. A.
Carroll and endorsed by William Carroll and Robert Brent, the
testator of the plaintiffs in error and made negotiable in the Bank
of the Metropolis.
The declaration set out the note and averred a demand of the
same "at the Bank of the Metropolis," where the said note was
payable.
At the trial, the plaintiffs below proved that the accommodation
given by the bank to said G. A. Carroll on a note similarly drawn
and endorsed with the present was given by the bank about three
years before the date of the note on which this suit was brought,
and was given with the knowledge of the endorsers thereon, and in
consequence of their solicitation.
For the purpose of showing an agreement between the bank and the
maker of the note that the note to be discounted and those
thereafter to be made for its renewal should be payable at the Bank
of the Metropolis and there demanded, the bank proved by parol
testimony that the said G. A. Carroll did not reside in the
District after the winter of 1817, in which W. Carroll lived in
Washington, but resided at Port Tobacco, in Maryland, about twenty
miles from the city, which he occasionally visited; that many of
the notes taken for the continuance of the accommodation were
expressed to be payable at the said bank; and that all the notes
previous to that on which this suit was brought were there
demanded, which demand was acquiesced in as sufficient and
subsequent notes given in renewal of those so demanded. The bank
also proved that it was its custom in all cases where the maker was
a nonresident to require an agreement to pay such notes at the
bank, and that they never would have agreed to discount the said
notes but on this condition.
The counsel for the defendants below objected to this testimony,
but the court permitted it to go to the jury. The counsel for the
defendants below then prayed the court to instruct the jury that to
enable the plaintiffs to sustain their action, it was necessary to
prove that a personal demand had been made on the maker of the
note. The court refused to give this instruction, but did instruct
the jury that if it
Page 26 U. S. 92
should be satisfied from the evidence that it was agreed by all
the parties whose names appear on the notes that the payment should
be demanded at the Bank of the Metropolis and that it was so
demanded, then a personal demand on the maker was not necessary. An
exception was taken to these opinions of the court, and their
correctness is now to be examined.
The plaintiffs in error contend that the testimony ought not to
have been admitted, because it is an attempt by parol proof to vary
a written instrument. But this is not an attempt to vary a written
instrument. The place of demand is not expressed on the face of the
note, and the necessity of a demand on the person, when the parties
are silent, is an inference of law which is drawn only when they
are silent. A parol agreement puts an end to this inference and
dispenses with a personal demand. The parties consent to a demand
at a stipulated place instead of a demand on the person of the
maker, and this does not alter the instrument so far as it goes,
but supplies extrinsic circumstances which the parties are at
liberty to supply.
No demand is necessary to sustain a suit against the maker. His
undertaking is unconditional, but the endorser undertakes
conditionally to pay if the maker does not, and this imposes on the
holder the necessity of taking the proper steps to obtain payment
from the maker. This contract is not written, but is implied. It is
that due diligence to obtain payment from the maker shall be used.
When the parties agree what this due diligence shall be, they do
not alter the written contract, but agree upon an extrinsic
circumstance and substitute that agreement for an act which the law
prescribes only where they are silent. We think, then, that there
was no error in admitting the parol evidence which was offered to
sustain the action.
If the testimony was admissible, there is no error in the
instruction given by the court. It was that if the jury believed
from the evidence that it was agreed by all the parties that the
demand should be made at the Bank of the Metropolis and that it was
so made, then a demand of the maker was not necessary.
This point is, we think, involved in the question respecting the
admissibility of parol testimony to establish the agreement. Had
the note purported on its face to be payable at the Bank of the
Metropolis, that express agreement would undoubtedly have dispensed
with a personal demand. If that agreement can be made by parol (and
unless it can, the testimony was inadmissible), the effect of the
parol contract is the same on this point as if it had been in
writing. The only
Page 26 U. S. 93
inquiry, therefore, is whether the testimony was sufficient to
be submitted to the jury for the purpose of proving the agreement.
We think it was.
The circumstances that the endorsers were themselves active in
procuring the accommodation for the maker of the note, that the
accommodation had been continued for years without a demand on the
person of the maker, that it was the invariable usage of the bank,
when the maker of an accommodation note resided out of the city, to
require, as the condition of the loan, a stipulation that a demand
at the bank should be sufficient, that this accommodation would not
have been continued after the removal of the maker out of the city
but on this condition, that the note purports on its face to be
negotiable at the Bank of the Metropolis, are facts from which the
jury might justifiably infer the agreement of the parties to
dispense with a demand on the person of the maker.
A verdict having been rendered for the bank, the defendants in
the court below filed errors in arrest of judgment.
The error alleged is that the first count in the declaration
neither charges a personal demand on the maker of the note nor
excuses the omission to make such demand. The declaration certainly
does not charge a demand on the person of the maker, but this was
not necessary if the parties had agreed that a demand at the bank
should be substituted for a demand on the maker.
The plaintiffs in error contend that the agreement is not
alleged in the declaration, and we admit that the omission to make
this averment would be fatal. In that event, the plaintiff below
would have shown no cause of action. But the declaration avers a
demand of the note "at the Bank of the Metropolis," where the said
note was payable. The note is set out in the declaration, and does
not purport on its face to be made payable at the bank. But the
averment in the declaration that it was payable there cannot be
true unless there was an agreement of the parties to that effect.
It is an averment which must have been proved at the trial or the
plaintiff below could not have obtained a verdict and judgment.
After a verdict, it is, we think, sufficient to sustain the
judgment.
There is no error, and the judgment is affirmed with
costs.
